COVID-19 Focus: How the Real Estate Market Has Been Impacted by COVID-19
Nearly every industry has been challenged by the COVID-19 pandemic in some capacity, whether it’s a suffering business struggling to stay afloat or a company that’s struggling to meet a booming demand. By interviewing experts in their respective fields, Higher Rock Education examines the short-term and long-term impacts of the COVID-19 pandemic in a wide range of industries.
Courtney Brown has worked as a broker, advisor and realtor for Hunter Rowe Real Estate Agents and Advisors for nearly four and a half years. She’s based in the Raleigh-Durham area of North Carolina and specializes in residential real estate. In the interview below, Brown discusses the impacts she’s seen in real estate during COVID-19, keeping up with the booming demand and potential permanent changes she expects in a post COVID-19 world.
Higher Rock Education: How long have you been in the real estate business? How long have you been with Hunter Rowe?
Courtney Brown: “I have been with Hunter Rowe the entire time that I’ve been in real estate, which is four and a half years. I work with clients in the Raleigh-Durham area.”
HRE: The real estate market has experienced a nationwide boom of homebuyers. Obviously, record-low interest rates play a significant factor, but do you think there are any other factors are contributing to the increase in demand?
CB: “I think a couple of things are going on. Interest rates weren’t as low as they are now during COVID-19, but they were still below 4% before COVID. So, rates aren’t the only factor, they’ve been low for years.
“When COVID first hit and everything went into extreme shutdown, we were very afraid that there would be no sales. Nobody has ever gone through anything like this before. In Durham, especially, you couldn’t go into the houses with clients [due to the city’s COVID restrictions]. Buyers could see it virtually, but to do a walk-through, I opened the door and they could go in. But I had to wait outside until they saw it. It wasn’t ideal.
“The longer COVID went on, the restrictions began to let up. In Durham, they let up mid-April . But I think part of what happened was that when people were spending so much time at home, they were re-evaluating their relationship to their home. They were saying, ‘Hey, I don’t want to get stuck here. This isn’t a conducive work environment. We always wanted a bigger yard.’ Because of that, you’re seeing a huge boom.
“Another aspect is that people are moving to this area. I see people who have chosen to live in the Triangle because the husband and wife can both work remotely and they want to be here.They’re getting out of big cities and that’s also part of re-evaluating lifestyle. They’re looking for somewhere they can work remotely and that’s only going to continue. I also think there are some people who are worried about the stock market and want to cash out and buy property. It’s also a great time to downsize.
“To me, the biggest thing I see with my clients is that they’re re-evaluating their relationship with their home.”
HR: Where does the real estate market in Raleigh-Durham rank in terms of demand compared to the national average?
“I’m not sure exactly where we rank from a numbers perspective, but we are seeing the same trends that every other city, other than New York, is seeing. Houses are selling for well above asking prices on the whole.
“Often, people are buying houses sight unseen, before it’s even open for showing. People are having to put down more money in due diligence. When I say that it’s high, I’ve heard of people putting down as much as $100,000, but typically people are putting down $8,000 to $10,000 to $25,000 in non-refundable money. People are having to put offers on multiple homes before they get one because it’s such a competitive market.
“In new construction, we’re seeing some bidding wars, which is unusual. I know [Washington] D.C. is having the same problem. Seattle is having a similar problem. Des Moines, Iowa is having that problem. So, we’re facing a similar situation as the rest of the country.
“Even before the announcement that Apple and Google were coming to the area, we were expecting 10-12% growth in appreciation of home values this year. That’s astronomical.”
HR: Have you seen a decrease in demand now that people are returning to work and the economy is opening back up?
CB: “No, I don’t. I think some of it where houses are getting so many offers, that will slow down. I think inventory will open up. Because I think a lot of what is going on has to do with a re-evaluation of lifestyle, I don’t think we’ll see a slowdown in sales or a decrease in growth.
It might even out or people may adjust. I don’t think we’ll see as many homes go over asking price as we’re seeing in the current environment.”
HR: What other general impacts has COVID-19 made on your work as a realtor?
CB: “Real estate touches on so many different areas. There have been a lot of supply chain issues. There have been national lumber shortages which have created problems for builders both of new construction and re-modeling. Some of the problems might be price gouging or importing or factories slow to re-open. Those factors have all contributed to rising costs. For example, I’m remodeling my home and the electrician is having trouble finding a specific wire he needs.
“If one person on a building crew gets sick, the entire crew has to leave the job site and stay home for a week.
“I think some of the problems we’re seeing will turn around as more people get vaccinated and factories open back up. I’m hopeful that prices will come back down a bit, but you’re seeing unreasonable prices on some things which a lot of that comes from supply chain issues.
“At Hunter Rowe, our office space is a shared work building. Most of the time now I work remotely; I don’t go to the office too often. That’s not really a problem for me, but I can imagine where some industries it could be.”
HR: Has Hunter Rowe made any changes in the ways you work with clients during COVID-19?
CB: “Hunter Rowe was like most other businesses. After we shut down, management wanted us to closely follow the CDC guidelines and the science. They’ve done a good job of encouraging their employees to follow the state and local guidelines. So, they encouraged mask wearing, social distancing, etc.
“Once people started to become vaccinated, it became more of doing what the client and the agent are comfortable with. Up until the Governor did away the mask mandate, we were required to wear a mask in the office. In our Raleigh office, it was permissible to take off your mask while you were working from an individual office.
“We offered virtual showings. If they want to walk through. We offered it even prior to COVID, but it’s nice for out-of-town clients. I’ve done buyer consultations over Zoom. Whenever, we do show a house, I always put out sanitizer and ask them to please abide by all COVID restrictions. You’re really just trying to be as safe as you can. At Hunter Rowe, we’ve never really done open houses as a firm, as a whole. I have done one personally during COVID, but I limited it to only one family inside at a time.
“The local realtor association has also put in place their own restrictions that we aren’t allowed overlapping showings. They’re highly encouraging no open houses, but I think some of it will stay. People are much more aware of germs since COVID, so things like making sanitizer available and wiping spaces down could remain in the future.”
HR: Do you still work from home?
“I’m still working from home. Before COVID, I would go into the office four days a week and I’m not doing that anymore.
“Even with my clients without kids, they’re saying that they need an extra bedroom or bonus room to create an office space. I think that a lot of industries will re-evaluate the use of an office space and allow their employees to work from home more often.”
HR: How have you adjusted to separate work life from home life?
CB: “I don’t think real estate is easy to separate work and life. A lot of my job is client dependent and being available. A lot of my job is also keeping in touch with people, calling them and checking in. Staying in touch has been impacted. Usually, when I call, I have a reason, but until recently, there hasn’t really been a good reason.
“In terms of trying to stay on a schedule, every morning during the week we have a short all-company call. That’s to keep up with our co-workers and also to keep up with the market to make sure everyone is aware of changes in law, things like that. Even though it’s on Zoom, it’s nice to have something to start your day. That’s important in helping me break up and plan for the day.”
HR: How do you believe COVID-19 will impact the real estate industry moving forward, both in the short term and long term?
“Short term, I think we’ll continue to see what we’ve been seeing. The heightened buying and selling that’s going on right now will continue, especially with the low mortgage interest rates and the low inventory. There is not much inventory.
“Long term, I don’t know. I tend to think we’ll continue to operate with the virtual showings. I think we’ll continue to offer video tours. I never used it before COVID and now I use it with all of my listings. It’s a good way to gauge clients interest in the house before I take them out there. I think the cultural change and people tying together their lifestyle and the relationship with their home for a little while. I don’t think many people have spent as much time in their home as in the last year.
“The bigger change long term in the Triangle, specifically, is with Apple and Google arriving. They’re both going to hire a lot of people and we’ll attract more tech workers. That will continue to be a draw.”